US President Donald Trump has signed a presidential memorandum that could impose tariffs on up to $US60 billion ($77 billion) of imports from China, sending shivers through Wall Street and prompting a vow from Beijing to “fight to the end”.

Under the terms of the memorandum, Mr Trump will target the Chinese imports only after a consultation period, a measure that will give industry lobbyists and legislators a chance to water down a proposed target list which runs to 1,300 products.

In response, the Australian share market lost about $38 billion in today’s trade.

The benchmark ASX 200 fell a hefty 2 per cent to 5,820 — its lowest level in five weeks, and third-lowest closing price for the year.

Only 11 stocks of the top 200 made it into the black, 4 held their ground and the other 185 fell.

The broader All Ordinaries index dropped 1.9 per cent 5,926 points.

Both indices are down 4 per cent since the start of the year.

The Australian dollar recovered slightly to 77.12 US cents.

On whether a trade war will eventuate, that depends on whether US President Donald Trump’s plan to impose $77 billion in tariffs on imports from China was just an aggressive negotiation strategy.

“The issue here is whether the White House intends to spark a trade war or is seeking to negotiate new trade terms,” said CMC Markets’ chief market strategist Michael McCarthy.

“If we see a measured response from the Chinese, things may not get as ugly as they’re currently looking.”